Skip to main content

Just 6% of value of farm produce sold at MSP: Can corporate control protect farmers?

By Aakriti Kanyal* 

The ongoing farmer’s protests in the borders of Delhi recently completed 100 days of struggle against the Farm Bills 2020 proposed by the Government of India. Hailed as one of the biggest people’s movements against the regime in contemporary times, the protests have been at the center of the public discourse for some time. And rightly so.
Amidst the tons of disinformation propagated by, as Chomsky would say, the agenda-setting media, the awareness raised about the farmer’s conditions and plight in the country has been sanguine. And yet still, some unheard voices have escaped the notice of the popular discourse: small and marginalized farmers. At the centre of the conversation about the bills and the farmer protests have been two issues: removal of Minimum Support Price (MSP) by making Agricultural Produce Market Committees (APMCs) redundant and the so-called privatization of agriculture.
The government’s proposal, as per Farmer’s Produce Trade & Commerce (Promotion & Facilitation) Bill, 2020 and Farmers (Empowerment & Protection) Agreement of Price Assurance & Farm Services Bill, 2020, was that the compulsion on farmers to only sell in APMCs will be taken down, opening up all sale and marketing of agricultural goods outside APMC mandis.
This would allow farmers to indulge in inter-state trade, electronic trading, better infrastructural support, and contract farming, as well as, will give an option to avoid exploitation at the hands of the middlemen. The protesting farmers fear that the increased involvement of private players and the prohibition on market fees and cess collection would make APMCs redundant and the concept of MSP will eventually vanish, leading to the market control fully in the hands of the private players.
But this is only a part of the picture. Data suggests that only 5 to 6 percent of the value of agricultural produce is sold at MSP, mainly restricted to a few states in Northern India, which coincidentally happens to be at the heart of the protests. Moreover, the majority of the agricultural output is not even sold at APMCs. The selling to private traders, money lenders, etc. is already in existence.
About 85% of the agriculture sector comprises of small and marginalized farmers. Most of them are landless labourers or hold a very small portion of land. Their livelihood is solely dependent on agriculture. Their concerns go much beyond APMCs and MSP. They struggle to merely get enough resources to make it to the end of the day, with most of them being stuck in a vicious cycle of debt. In essence, the discourse around the Farm Bills largely excludes the repercussions of these laws on this marginalized sect of the farming community.
With the advent of these bills, Prime Minister Narendra Modi aspired to double the income of the farmers by the year 2022. As the involvement of private players is usually hailed to be the holy grail of efficiency and increased income, the increased involvement has been claimed to make life easier for the farmers. But, of course, this is a quixotic dream.
Fundamentally, because at the heart of the agrarian crisis looming over the country is the farmer and farm laborer’s debt. One doesn’t need to be an expert to understand why debt is a vicious cycle, especially for marginalized farmers. For instance, in a drought-prone area such as Kalahandi, Odisha, the farmer might have already pledged their crop of 2023 to a certain moneylender, solely for basic sustenance in 2020. These instances are present in multitudes across the country.
Do the Farm Bills and the government address this issue, let alone solve it? Now, coming back to what is being termed as the privatization of agriculture, that is, increased participation of private retailers, traders, and so on. But that has already been existing. The difference is the introduction of corporate entities and contract farming. The supporters of the bill claim that this will empower farmers by the means of price discovery, increased choice of buyers, and better infrastructural amenities. But there is a problem.
To sincerely believe that all such institutions, in all their benevolence, are going to protect the farmers’ rights and ensure their welfare would be to believe in the existence of utopia for two simple reasons.
Firstly, the agriculture sector of the country suffers on many fronts. Farmers require price stability and assurance, because the circumstances can turn much worse for them. The high number of suicides exemplifies this. The entry of private players, especially corporates can make this better if one’s being hopeful, but also has the power to worsen it. Contract farming will enable control lying with a handful of these corporates that can deteriorate the bargaining power of the farmers.
This can lead to price fluctuations and manipulation, as well as create monopolies with control on price and choice of the crop in the hands of these corporates. A harrowing example of this was stated by P Sainath in an interview where he lamented the story of farmers in Kerala who switched from growing crops such as rice to vanilla, in around 2001, with the promise of spectacularly high prices by a few companies in the USA.
The eventual outcome of it was the highest number of farmer suicides in Kerala. This is perhaps an extreme instance but it shows the scale of the catastrophe that can be brought on farmers. But government has the power of regulating such instances and ensuring protection to the farmers.
Demonizing of APMC is wrong. What is in need is to strengthen that institution that has supported all kinds of farmers over the years
Secondly, the Farm Bills fail to provide legal protection to the farmers. If any clause of the contract is violated by the private entities, farmers can always approach the judiciary to demand justice. While the rich and big farmers might have the means to afford the required legal help, the small and marginalized farmers are neither literate enough nor have the means to protect themselves from such a circumstance. If one goes through the wording of Section 13 of the Farmers’ Produce Trade & Commerce Act, 2020, the ambiguity is astounding.
Moreover, Section 15 of the same act disallows farmers to approach the civil court for resolution, giving authority to a bureaucratic Conciliation Board. In light of a dispute, the farmers essentially lose the right to seek immediate and judicious redressal.
Environmental activist Prafulla Samantara commented that contract farming along with the changes in the Essential Commodities Act stands a chance to threaten the food security of India. If done on a large scale, it will curb the food diversity of the country, possibly endangering the sovereignty of the nation. Moreover, the peril of stockpiling of such commodities by corporate entities will only lead to price control in their hands.
The repercussion on the small and marginalized farmers can cost them their livelihood. A shining example has been the corporatization of agriculture in the USA. It is without a doubt that the agriculture sector in the country needs reforms. But the solution provided by the government is not solving the right problems. Even if one ignores the unjust way the bills were passed in Rajya Sabha, the basic problem is that the major stakeholders, i.e., the farmers were not a part of these proposed solutions.
Their plights vary from region to region and a one-shoe-fits-all approach makes no sense. 
Small and marginalized farmers need protection from money lenders, the unpredictability of the weather, and many other problems. Demonizing of APMC is wrong. What is in need is to strengthen that institution that has supported all kinds of farmers over the years instead of making it redundant. APMC has earned the ill-reputation due to mismanagement in procurement by the state governments. 
And one should not forget why they were introduced in the first place: to safeguard from the private retailers. Then, a price guarantee needs to be provided on paper in the bills to ensure protection to the farmers against volatility due to price manipulation and fluctuation. And lastly, it is imperative to provide the farmers with the required legal recourse to save from any exploitation by the private entities. The protests against the bills hold crucial value, not only for the future of agriculture but also to uphold the sanctity of our democracy.
The attention garnered, internationally, will hopefully help in shaping a better future for the farmers and their struggle will continue to inspire generations to come. It has also mobilized small and marginalized farmers to raise their voice. But it has to be acknowledged that there is yet, a dearth of representation in the popular discourse. The small and marginalized farmers of rural areas, tribal communities, in regions with extremely fragile weather conditions, and so on remain to be unheard. And hence, it is the government’s and our collective duty to hear them, their plights, and bring attention to them. Because only then can we hope to chart a brighter future for the agriculture sector and subsequently, the development of the country.
---
*MBA, 2019-21, Indian Institute of Management, Indore

Comments

Anonymous said…
The author makes a valid point. So well drafted and researched. I hope we get to read more from you, Aakriti. Cheers.
Anonymous said…
So well researched and drafted. The author has put in a lot of efforts of make it such an informative read. Wish to read more from you, Aakriti. Cheers.
Unknown said…
It Seems Authetic Journalism News Sense.
Anonymous said…
the author has outdated data. The same as Agriculture Minister aspirant Ashok Gulati used. The data relates to 13 - 14. Data is available as of 18 -19. based on this the 6% is a deliberate misinformation - which one needs to see in the video of Ashok Gulati - IIT Economist and Karan Thapar. The proper number for whatever it is worth is 12% and not 6%.
Why do I say "for what it is worth". The same video will tell you that the mandi story was not implemented uniformly across India. Therefore the northern states are at an advantage. The Eastern states are late starters and Nitish bhai eliminated the mandi story in 2006 and the Bihari farmer was cheated out of a decent living.
Finally it would be worth while noting that the largest supplier of wheat to the government at MSP is Madhya Pradesh. Punjab and haryan combined do not contribute more that about 40% or so.
The same is the story with paddy (2019). At that time about 9 states in India contributed to sale at MSP - all major rice growers including the poorly represented eastern states and Nitish bhai Bihar.
There is plenty of other disinformation around. This is adequate for the time being
SAMIR SARDANA said…
Linked to the Agri scam is the FCI Con Job

The FCI Con Job

No one knows what stock FCI is holding ! There are 2 types of stocks with FCI.1 is in FCI godowns and the 2nd is in the stomach of rodents (who are also stored in FCI godowns – as permanent residents).If all goes well,2 rats can produce 1000 rats in 30 days.But the genius of the GOI is infinite – as it plans to export rat meat – and so,it is a form of integrated storage – from integrated farming to integrated storage ! dindooohindoo

No one knows the proximate quantity and quality of FCI Stocks – except the rats in the FCI godowns.

So the so called prime wheat purchases by arhatiyas,is diverted to the private market and the spurious and lower grade wheat is sold to FCi as prime.The sales to the private sector is at a premium (by the arhatiyas)

Similarly,when the PDS stocks reach the POS storage yards,the prime wheat is diverted to the private market and the 2nd grade wheat is procured from the arhatiyas and fed to the poor.It is said that the rats in the FCI godowns eat the BEST wheat and so,the Indian poor eat a grade lower than rats – but they are happy that they are getting anything at all.Perhaps it is time to feed Indians – rat meat.

The Quality Con Job

The poor farmers with a debt load are ripped off by the arhatiyas – in the grading system – to sell prime as offgrades.This rip off,is then,in part, transferred to the rich farmers whose offgrades are bought as prime,and the rest of the offgrades are palmed off to the FCI as prime or sold in the private markets.It is a single digit % of the FCI stocks and aggregate purchase, and the GOI neither the means nor the IQ to track it – but it is in the Billions of USD.

The Justification of the FCI Con Job

The GOI approves of this rip off as they say that economic value addition by the private sector is better than rats eating wheat and rice in FCI Godowns.And the tragedy is that they are right.

Therefore rats in FCI godowns are better off than Indian farmers and Indisn consumers of wheat

The failure of “India”

India is a failed experiment.The Constitutional structure of India is being dismantled.The states have failed miserably on all counts.GST is proof of the fact that the GOI has reckoned after 73 years,that Indian states CANNOT manage their finances and their economies.

Draconian Indian Terror laws and census laws is proof that the entire legal and judicial architecture of India is obsolete

India is obsolete

TRENDING

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

How lead petitioner was rendered homeless when GM mustard matter came up in SC

By Rosamma Thomas*  On January 5, 2023, the Supreme Court stayed a December 20, 2022 direction of the Uttarakhand High Court to the Indian Railways and the district administration of Haldwani to use paramilitary forces to evict thousands of poor families occupying land that belonged to the railways.  Justice AS Oka remarked that it was not right to order the bringing in of paramilitary forces. The SC held that even those who had no rights, but were living there for years, needed to be rehabilitated. On December 21, 2022, just as she was getting ready to celebrate Christmas, researcher Aruna Rodrigues was abruptly evicted from her home in Mhow Cantonment, Madhya Pradesh – no eviction notice was served, and nearly 30 Indian Army soldiers bearing arms were part of the eviction process. What is noteworthy in this case is that the records establishing possession of the house date back to 1892 – the title deed with the name of Dr VP Cardoza, Rodrigues’ great grandfather, is dated November 14

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Tax buoyancy claims when less than 4% Indian dollar millionaires pay income tax

By Prasanna Mohanty  In FY18, the last year for which disaggregated income tax data is available, only 29,002 ITRs declared income above Rs 5 crore, while Credit Suisse said India had 7.25 lakh dollar millionaires (the wealth equivalent of Rs 8 crore and above) that year. Often enough, the Centre claims that demonetization in 2016 raised tax collections, improved tax efficiency, and expanded the tax base. Now RBI Monetary Policy Committee (MPC) member Ashima Goyal has also joined their ranks, attributing the “claims” of rising tax collections in the current fiscal year to “tax buoyancy” brought by the demonetisation . Do such claims have any basis in official records? The answer is unequivocal. The budget documents show the tax-to-GDP ratio (direct plus indirect tax) increased from 10.6% in FY16 (pre-demonetization) to 11.2% in FY17, remained there in FY18 (demonetization and GST fiscals), and then fell to 9.9% in FY20. In FY22, it improved to 10.8% and is estimated to drop to 10.7% in

Gandhian unease at Mahadev Desai book launch: Sabarmati Ashram may lose free space

By Rajiv Shah  A simmering apprehension has gripped the Gandhians who continue to be trustees of the Sabarmati Ashram: the “limited freedom” to express one’s views under the Modi dispensation still available at the place which Mahatma Gandhi made his home from 1917 to 1930 may soon be taken away. Also known as Harijan Ashram, a meeting held for introducing yet-to-be-released book, “Mahadev Desai: Mahatma Gandhi's Frontline Reporter”, saw speaker and after speaker point towards “narrowing space” in Gujarat for Gandhians (as also others) to express themselves. Penned by veteran journalist Nachiketa Desai, grandson of Mahadev Desai, while the book was planned to be released on January 1 and the meeting saw several prominent personalities, including actor-director Nandita Das, her scholar-mother Varsha Das, British House of Lords member Bhikhu Parekh, among others, speak glowingly about the effort put in for bringing out the book, exchanges between speakers suggested it should be rele

Civil rights leaders allege corporate loot of resources, suppression of democratic rights

By Our Representative  Civil rights activists have alleged, quoting top intelligence officers as also multiple international forensic reports, that recent developments with regard to the Bhima Koregaon and the Citizenship Amendment Act-National Register of Citizens (CAA-NRC) cases suggest, there was "no connection between the Elgaar Parishad event and the Bhima Koregaon violence." Activists of the Campaign Against State Repression (CASR) told a media event at the HKS Surjeet Bhawan, New Delhi, that, despite this, several political prisoners continue to be behind bars on being accused under the anti-terror the draconian Unlawful Activities (Prevention) Act. Addressed by family members of the political prisoners, academics, as well as social activists, it was highlighted how cases were sought to be fabricated against progressive individuals, democratic activists and intellectuals, who spoke out against "corporate loot of Indian resources, suppression of basic democratic

Kerala natural rubber producers 'squeezed', attend to their plight: Govt of India told

By Rosamma Thomas   Babu Joseph, general secretary of the National Federation of Rubber Producers Societies (NFRPS) at a recent discussion at Mahatma Gandhi University, Kottayam, explained that it is high time the Union government paid greater heed to the troubles plaguing the rubber production sector in India – rubber is a strategic product, important for the military establishment and for industry, since natural rubber is still used in the manufacture of tyres for large vehicles and aeroplanes. Synthetic rubber is now quite widespread, but styrene, which is used in making synthetic rubber and plastics, and also butadiene, another major constituent of synthetic rubber, are both hazardous. Prolonged exposure to these even in recycled rubber can cause neurological damage. Kerala produces the bulk of India’s natural rubber. In 2019-20, Kerala’s share in the national production of rubber was over 74%. Over 20% of the gross cropped area in the state is under rubber cultivation, with total

Cyrus Mistry, PM Modi’s brother: What do these accidents have in common? Merc!

By Rosamma Thomas*  In September 2022, in an accident at Palghar near Mumbai, Cyrus Mistry, former chairman of the Tata Group, died in a road accident . On December 28, 2022, a road accident in Mysore left one of Prime Minister Narendra Modi’s brothers injured. What is common in these accidents? The car that crashed into the divider on the road, in both these cases, was manufactured by “prestigious” German manufacturer Mercedes Benz. One former dealer of Mercedes Benz cars in India has been raising issues of the threat to the lives of those riding these cars for many years now. Cama Motors, among the oldest dealers of foreign cars, having started business in pre-independence India, noted over 10 years ago that Mercedes Benz was indulging in corrupt practices . The cars are currently priced between Rs 41 lakh and Rs 2.92 crore in India; few people realize that the pride of owning a Merc comes at considerable risk to life. Cama Motors carefully documented several of the flaws on a websi

Bangladesh 'rights violations': US softens stance, fears increased clout of China, India

By Tilottama Rani Charulata*  In December 2021, in addition to the Rapid Action Battalion (RAB), the United States imposed sanctions on seven former and current officers of the force, alleging serious human rights violations. Benazir Ahmed and former RAB-7 commander Miftah Uddin Ahmed were banned from entering the US. RAB as an institution was also canceled the support it was getting from the US and its allies. At the same time, those under the ban have been notified of confiscation of assets held abroad. The anti-crime and anti-terrorism unit of the Bangladesh Police, RAB is the elite force consisting of members of the Bangladesh Army, Bangladesh Police, Bangladesh Navy, Bangladesh Air Force, Border Guard Bangladesh, Bangladesh Civil Service and Bangladesh Ansar, and has been criticized by rights groups for its use of extrajudicial killings and is accused of forced disappearances. The government of Bangladesh has been insisting about lifting the ban on RAB, but the US had till recen